Bill Bonner: what's your take?

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TreadLightly
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Bill Bonner: what's your take?

Post by TreadLightly » Thu Apr 19, 2018 12:32 am

my husband has really enjoyed following and internalizing Bill Bonner's take on the economy. i'm more Boglehead (didn't know it until recently, but I am) with a leaning toward hoping to get the chance to buy into a market downturn and score some great long-term returns.

after reading some of the Intro Boglehead recommended reading, there are some red flags that go up for me regarding Bill. the primary current issue is that he has, for a few years now, been forecasting economic doom, which has significantly impacted our willingness to enter the market. my husband out of fear, me out of hoping to take advantage of a dip. as we all know now, those last few years were pretty peachy. BB holds firm doom is looming, we remain in fear of entering the market at a high, and instead lose a lot of money every day in lost opportunity and inflation. if we make up a number of a clean 4% return for our uninvested funds over the past 5 yrs, we would've gained $260,000. instead we've bought some dern blasted gold and silver for the end of the world.

we've got no problem throwing money into equities when we hit a downturn, but with BB swearing it's coming, it's hard to buy in without a clear dip. i've essentially twisted my husband's arm to let me start trickling it in, but i would much rather help him believe in it than convince him.

i don't want any more gold, and i don't want a homestead in Argentina, Bill. so i want to know, can you give me a little friendly opinion on him? perhaps enough to change the opinion of a long-time reader? or does Bill Bonner have the gift of economic foretelling?

(mid 30s, high portfolio value, about 65% cash)

Edit: I read his 2015 response to criticism and accusations, and his response is an interesting read. He does not claim to know anything, he and his many publications provide the information the readers enjoy, with an emphasis on boldness not on being correct. He also says they predicted the 2000 and 2008 crashes, but I'm wondering how many years he warned of them before they actually happened.

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slayed
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Re: Bill Bonner: what's your take?

Post by slayed » Thu Apr 19, 2018 1:33 am

TreadLightly wrote:
Thu Apr 19, 2018 12:32 am

we've got no problem throwing money into equities when we hit a downturn, but with BB swearing it's coming, it's hard to buy in without a clear dip.
we just had a dip in February and again in March (worst week in 2 years for US stocks), did you buy then? why not?

snarlyjack
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Re: Bill Bonner: what's your take?

Post by snarlyjack » Thu Apr 19, 2018 6:07 am

TreadLightly,

To quote Jack Bogle: "No one knows nothing"...

As far as market timing: "I don't know anyone who
can time the market & I don't know anyone who knows
anyone who can time the market"...

My strategy is...I dollar cost average into the market
each payday & let the chips fall where they fall...

Grt2bOutdoors
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Re: Bill Bonner: what's your take?

Post by Grt2bOutdoors » Thu Apr 19, 2018 6:17 am

The market is basically flat this year. Stop looking at past performance because the market has been in a rising trend since 1931. During that time, there has been a World War, numerous recessions, Korean War, Vietnam War, two oil embargoes, Iran Embassy crisis, the collapse of internet stocks, September 11th, two Iraqi military actions, a deep recession, collapse of large financial institutions. Tell Bill Bonner to take a hike.

Since you are married to husband half the money should be yours, take 25-50% of it and start dollar cost averaging into a 3 fund portfolio- tell your husband you want to run a contest: actual results of your portfolio vs. results of the Bonner portfolio. Winner after 5 years will then manage money.
"One should invest based on their need, ability and willingness to take risk - Larry Swedroe" Asking Portfolio Questions

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220volt
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Re: Bill Bonner: what's your take?

Post by 220volt » Thu Apr 19, 2018 7:57 am

The real data is available for free online. Why would anyone listen to people like Bill Bonner, Peter Schiff, and other doomsday preachers instead of Bogle, Buffet, Monger is beyond me.

These people have been wrong more times than a coin flip. Meaning: they could not have been more wrong even if they tried.
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magicrat
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Re: Bill Bonner: what's your take?

Post by magicrat » Thu Apr 19, 2018 8:07 am

A 3-fund portfolio probably would have returned a lot more than 4% over the last few years (assuming a decent stock allocation). You've probably lost out on more than you think. The key is to get a detailed plan and start executing it. If that detailed plan is market timing, then get specific about when and how you'll enter the market (not some ambiguous future "dip"). What price levels? What happens if those price levels never come?

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Re: Bill Bonner: what's your take?

Post by indexonlyplease » Thu Apr 19, 2018 8:24 am

I think they always state market timers always lose in the end. If someone could predict the next crash, can you imagine everyone would follow the advise and get rich. That person would be more of a guru than Warren Buffet.

They have been talking about a crash for years now. We all know its coming one day? Maybe? But do you think anyone knows.

Also, I never heard of Bill Bonner. Who is that and glad I don't know. Does he also recommend stock piling jars of food and ammo in the basement for the upcoming dooms day.

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Pajamas
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Re: Bill Bonner: what's your take?

Post by Pajamas » Thu Apr 19, 2018 9:03 am

Never heard of this guy Bill Bonner but sounds like he's a permabear. Honestly, you should probably give up and buy your husband a permabear tee shirt, bumper sticker, and coffee mug and just be glad that he's not gone full-on goldbug prepper and also invest your portfolio as you think it ought to be invested. That way you will have something to live on if you get old before the next Great Depression.

MotoTrojan
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Re: Bill Bonner: what's your take?

Post by MotoTrojan » Thu Apr 19, 2018 9:19 am

4% is a gross underestimate of recent returns but I can see how it would make you feel better. If/when you do get more fully invested, make sure you understand that a downturn can/will happen, and that would not reaffirm Bill/Husband’s concerns. Worst thing you can do is invest, take a 40% loss, and become a permabear again.

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unclescrooge
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Re: Bill Bonner: what's your take?

Post by unclescrooge » Thu Apr 19, 2018 9:37 am

TreadLightly wrote:
Thu Apr 19, 2018 12:32 am
my husband has really enjoyed following and internalizing Bill Bonner's take on the economy. i'm more Boglehead (didn't know it until recently, but I am) with a leaning toward hoping to get the chance to buy into a market downturn and score some great long-term returns.

after reading some of the Intro Boglehead recommended reading, there are some red flags that go up for me regarding Bill. the primary current issue is that he has, for a few years now, been forecasting economic doom, which has significantly impacted our willingness to enter the market. my husband out of fear, me out of hoping to take advantage of a dip. as we all know now, those last few years were pretty peachy. BB holds firm doom is looming, we remain in fear of entering the market at a high, and instead lose a lot of money every day in lost opportunity and inflation. if we make up a number of a clean 4% return for our uninvested funds over the past 5 yrs, we would've gained $260,000. instead we've bought some dern blasted gold and silver for the end of the world.

we've got no problem throwing money into equities when we hit a downturn, but with BB swearing it's coming, it's hard to buy in without a clear dip. i've essentially twisted my husband's arm to let me start trickling it in, but i would much rather help him believe in it than convince him.

i don't want any more gold, and i don't want a homestead in Argentina, Bill. so i want to know, can you give me a little friendly opinion on him? perhaps enough to change the opinion of a long-time reader? or does Bill Bonner have the gift of economic foretelling?

(mid 30s, high portfolio value, about 65% cash)

Edit: I read his 2015 response to criticism and accusations, and his response is an interesting read. He does not claim to know anything, he and his many publications provide the information the readers enjoy, with an emphasis on boldness not on being correct. He also says they predicted the 2000 and 2008 crashes, but I'm wondering how many years he warned of them before they actually happened.
He has quite the following. He makes $10 million a year selling all sorts of publications under the Agora umbrella.

He has turned this into a huge empire and uses this wealth to invest in real estate globally. He lives in multiple countries each year, and avoids paying income tax on a lot of his earnings.

I had the pleasure of working for one of these subsidiaries several years ago, which, at the time had 2 million subscribers... More than the WSJ did. It was my favorite job ever. Except for my direct boss who was a jack ass.

He is very entertaining, but if you follow his bearishness, you will never achieve financial independence.

If you think a beat market is coming, then tone down your equity exposure, don't just sit in cash. Go from 70% to 50%, or 50% to 35%.

I have a few months worth of basic living expense in gold. It's an insurance policy against extreme financial situations. Anything more is a waste of resources.

invst65
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Re: Bill Bonner: what's your take?

Post by invst65 » Thu Apr 19, 2018 10:16 am

I am embarrassed to admit that Mr. Bonner once convinced me to sell all my stock. It started with an article on a website (Lew Rockwell), the gist of which was that you need to get all of your money out of the stock market right NOW! It wasn't just the article however. There was an email link that went directly to him and he surprised me by answering my questions right away. At the time I was grateful for the free advice.

If that had turned out to be a good move, even in the short term, I might not have learned my lesson well enough, but as I recall it was quite the opposite. That was the only time in my investing career that I ever did anything like that and thanks to Mr. Bonner, I resolved never to do it again. So I guess you could say his advice was helpful after all.
Last edited by invst65 on Thu Apr 19, 2018 10:36 am, edited 1 time in total.

GibsonL6s
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Re: Bill Bonner: what's your take?

Post by GibsonL6s » Thu Apr 19, 2018 10:19 am

I get one of their daily emails. I stopped reading it awhile ago. They have a very successful business selling newsletter and putting on conferences that for Bogleheads provide no actionable information. They can be histrionic and love to call meltdowns and catastrophes in the markets. I don't believe for a minute they actually invest the way they recommend.

SimplicityNow
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Re: Bill Bonner: what's your take?

Post by SimplicityNow » Thu Apr 19, 2018 10:57 am

Believe what you choose to believe. Obviously following his advice so far hasn't worked out too well for you. But you still want to follow his advice?

Eventually he may be right. Or not.

The simple fact is no one can predict the future.

Most "experts" predict market returns in the next ten years will be lower then they have been. That group includes such luminaries as our beloved Jack Bogle. Will they be correct? Only time will tell.

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Re: Bill Bonner: what's your take?

Post by Dottie57 » Thu Apr 19, 2018 11:13 am

OP,

I started investing in 1988(401k). I kept plowing money into various investment accounts whether the market was up or not -including the Great Depression and various market highs. No market timing or hanging back from investing.

I feel pretty good with the results and retired this year at 61.

Stop market timing and dollar cost average the money in. That guy your husband listens to will be right some day about a market crash. It is just that no one knows when. No one has the right magic 8 ball.

One of the major ideas in Bogleheads is that we accept what the market gives. Up or down.

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Re: Bill Bonner: what's your take?

Post by pkcrafter » Thu Apr 19, 2018 11:18 am

Who is Bill Bonner? Never mind, I don't need to know.

Treadlightly, you and your husband's philosophy are wrong and harmful to long term potential wealth accumulation. You have to crank up education.

Paul
When times are good, investors tend to forget about risk and focus on opportunity. When times are bad, investors tend to forget about opportunity and focus on risk.

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Cyclesafe
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Re: Bill Bonner: what's your take?

Post by Cyclesafe » Thu Apr 19, 2018 11:31 am

As noted repeatedly above, a BH does not pay attention to the financial noise.

I understand the reluctance to have bought in at the top. You are afraid that you will feel that you have made a mistake. Every day you are down you will be thinking that you lost money. You will flagellate yourself over it. You will gnash your teeth, render your clothing.

A BH resists this.

A BH believes that over time - time measured in decades - equity gains will pretty much reflect inflation, time value of money, plus a market risk premium. Specific company and sector risk has been diversified away and fees have been minimized.

To ameliorate, a BH doesn't hold 100% equity, but instead adds ballast to his/her portfolio in the form of diversified fixed funds in proportion to their tolerance for risk. To kid himself/herself, he/she may dollar cost average into equity if BH precepts haven't fully manifested. To reassure himself/herself, he/she may back test even though the past only indicates the range of outcomes that have happened, not those that will happen.

All market prognosticators have a shtick. It needs to be kinda unique since as they are in fierce competition with other self-styled gurus for the "investing" public's attention. Every one of them decides their niche and selectively pulls data that support their point of view. When what they have been advocating seems to be happening, they get attention; when it doesn't, they don't. Until next time. A broken (analog) clock is right twice a day.

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Pajamas
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Re: Bill Bonner: what's your take?

Post by Pajamas » Thu Apr 19, 2018 11:33 am

TreadLightly wrote:
Thu Apr 19, 2018 12:32 am
. instead we've bought some dern blasted gold and silver for the end of the world.
Oh, you should watch this one-minute short film about when that actually comes to pass.

https://digg.com/video/survivalist-short-film

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Re: Bill Bonner: what's your take?

Post by Jack FFR1846 » Thu Apr 19, 2018 12:10 pm

Time in the market, not market timing.

My investing follows that simple rule. I love reading all these financial entertainment whack balls. They come up with the absolutely funniest views of the world. Fortunately, my investing rules don't have any connection to any news or entertainment I read.

Who is this Bill Blabbermouth anyways?
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frugalecon
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Re: Bill Bonner: what's your take?

Post by frugalecon » Thu Apr 19, 2018 12:22 pm

Between my retirement contributions every two weeks, my spouse's contributions once per month, my backdoor Roth contribution, monthly investments in taxable, etc., our household is investing almost every week. Some weeks the market is doing well, some weeks it is doing poorly. It all comes out in the wash, and I don't really worry about doom-and-gloomers. My own view is that it is good to largely automate a strategy that reflects your best understanding of how to invest for the long term, and then get on with life.

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whodidntante
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Re: Bill Bonner: what's your take?

Post by whodidntante » Thu Apr 19, 2018 5:57 pm

I had never heard of Bill Bonner, but I like to learn about influential people and cult leaders. So I googled him, and found a gem of a video where he and Alex Jones discussed their economic views of the world. In summary, Bill Bonner talks about the credit cycle, central bank intervention in markets, and expresses a view that the market should be allowed to correct mistakes. That view used to be called laissez-faire though the term seems to have fallen out of use.

The thing is, there is much truth to this thinking about the credit cycle. He'll be able to say I told you so eventually. It is part of our nature to look for threats and part of us wants the next disaster to come because we know it will, and waiting is tiring if you spend the time worrying. We'll invite him and the other permabears on TV while the thing unwinds.

Don't market time based on the ostensible conclusions of gurus. Unless you want to be wrong wrong wrong wrong right wrong wrong. If you allow analysis paralysis to take hold, every buy you make will seem like a bad idea. We'll be OK after the next downturn. Maybe not the same, but OK.

The nature of risk is that it sometimes shows up. Be honest about your willingness, need, and ability to take risk. Don't take more risk than you need to, especially if you're the nervous sort. Maybe you should have a modest allocation to stocks, or no stocks at all.

That said, I'm undecided which one he is: influential or cult leader. He's definitely a charismatic dude and I can see why you might conclude he knows what he is talking about. Bill Bonner I mean, not Alex Jones.

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Re: Bill Bonner: what's your take?

Post by RadAudit » Thu Apr 19, 2018 6:47 pm

Never heard of him.

However, there is a non-zero probability that he might be right one day - probably the day after you go all in.

I would suggest you spend some time and figure out an asset allocation that fits your need, ability and willingness to accept risk. Yes, a portfolio value will vary over time. However, the variations shouldn't give you sleepless nights. And, if you are far enough along, hopefully you have reached the point where the portfolio throws off enough money to meet an acceptable percentage of your budget (residual living expenses or those not covered by SS, pensions, etc.) - and variations in the portfolio represent an opportunity to rebalance back to your target asset allocation once a year or so.*

* 4% of X = $260,000??
FI is the best revenge. LBYM. Invest the rest. Stay the course. - PS: The Calvary isn't coming, kids. You are on your own.

magneto
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Re: Bill Bonner: what's your take?

Post by magneto » Fri Apr 20, 2018 5:46 am

Bill Bonner views are usually well-informed and can interest.
But as regards the future he may be incorrect, correct, or only partially correct.
We have to admit that we simply don't know. :annoyed

One idea to such an investment 'timing' predicament is to 'time diversify', using DCA, Value Averaging or similar.
Once sufficient precious capital has been invested, surely the correction will then be triggered. :(

Personally have felt markets expensive for some time (albeit a lttle less so recently), so our far from perfect answer has been to adjust exposure in a progressive process linked to valuations. Could have made more money by being 100% Stocks; but that is outwith comfort zone.

Good Luck whatever you decide.
'There is a tide in the affairs of men ...', Brutus (Market Timer)

TreadLightly
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Re: Bill Bonner: what's your take?

Post by TreadLightly » Sat Apr 21, 2018 2:57 pm

Thanks for all the responses. Had a small procedure and was out for a few days.

I'm going to read all of these responses. The first few I saw, I want to address yes I know 4% is a crazy low estimate, but it's a definite so I just picked it.

I am just, like a month maybe?, getting into the Boglehead knowledge. I've sold our high ER holdings, and am moving all of our assets to self-managed accounts, they just haven't all settled yet. So no, I didn't get to buy the latest dip but would have.

I don't want to muscle my way into getting my husband to believe in the Boglehead philosophy, I really want him to believe in it (but he doesn't have time to read the info so I've got to educate him). If/when the economy tanks, I want this to have been a joint decision, and I want us both to be behind buying the dip.

I think the letter I read to him from Bill Bonner shook his faith a little. I also suspect there's good stuff in this thread to help that along.

I'm looking forward to reading each one!

BogleMelon
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Re: Bill Bonner: what's your take?

Post by BogleMelon » Sat Apr 21, 2018 3:50 pm

This article could help:
Swedroe: Better To Face Correction
http://www.etf.com/sections/index-inves ... nopaging=1
"One of the funny things about stock market, every time one is buying another is selling, and both think they are astute" - William Feather

TreadLightly
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Re: Bill Bonner: what's your take?

Post by TreadLightly » Sat Apr 21, 2018 3:57 pm

Giving my husband the term "permabear" will be helpful.

Part of our paralyzing problem has been feeling like we couldn't make these decisions, so we just didn't do anything. We feel a heavy burden to not lose this money, and in doing so we've already lost some by inaction.

Now that I'm learning the way of the BH, I'm making brash moves. I'm having no problem buying smart fixed income choices to fill up our AA for bonds. We are Value Averaging the cash into our equities allocation. But we have over a million dollars in cash (self-flagellation) and VA will take a long time. I think we're going to weight heavy on fixed income while we take 2-3 years to buy fully into our equity allocation. I'm hoping with this time frame we can feel confident about not buying at an extreme high, and maybe run across some periods where we buy in heavily. I don't have a solid number on what that would be. Pretty much when Wall Street panics.

I'm glad to know that the red flags I saw regarding Bill Bonner after the BH reading I've done were right. And I'll share the wisdom shared here to help my husband see. When BB said he'd predicted prior crashes, I really wish I could show my husband how long he "predicted" them before they happened.

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Re: Bill Bonner: what's your take?

Post by UpperNwGuy » Sat Apr 21, 2018 4:18 pm

Who is Bill Bonner? This entire thread confuses me.

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Re: Bill Bonner: what's your take?

Post by RadAudit » Sat Apr 21, 2018 4:31 pm

TreadLightly wrote:
Sat Apr 21, 2018 3:57 pm
Part of our paralyzing problem has been feeling like we couldn't make these decisions,
Speaking as one of the dimmer bulbs on the tree, I can assure you that you are quite capable of making good decisions about investing.* There are a good number of folks on this forum who love to help folks with this stuff. If it takes two to three years to get to where you want to be on the equity side, that's OK. At least you started. Your farther along than if you hadn't started. And, you'll feel a lot more comfortable with all this as time goes bye.

Come back early and often with any questions you may have.

*The key attribute is patience not excessive intelligence. (thank goodness!)
FI is the best revenge. LBYM. Invest the rest. Stay the course. - PS: The Calvary isn't coming, kids. You are on your own.

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Re: Bill Bonner: what's your take?

Post by arcticpineapplecorp. » Sat Apr 21, 2018 6:44 pm

I bet you haven't read Larry Swedroe's book titled "Rational Investing in Irrational Times". If you had, you'd realize you're making two mistakes that he covers in this book (he covers 52 mistakes in all):

1. Mistake 39 Do You Rely on Market Gurus?
From that chapter:
Each year Fortune selects its All-Star team of security analysts-the very best of the gurus. How did the stock recommendations the year 2000's All-Stars made in July of that year perform? While the S&P500 Index was falling nine percent, their stock picks were falling twenty-two percent through the end of May 2001. Source Fortune June 11, 2001.

Unfortunately for investors who rely on the forecasts of market analysts and strategists, such forecasts are only likely to produce yachts for the forecasters themselves, not for their clients. Steve Forbes, publisher of the magazine that bears his name, obviously agrees, quoting his grandfather, who founded the magazine eighty years ago: "You make more money selling the advice than following it." Source: St. Louis Post Dispatch, Oct 4, 1997.
On page 199 (hardback edition) Larry writes about a Clayton Christensen who wrote a book titled "The Innovator's Dilemna: The Revolutionary National Bestseller that Changed the Way we Do Business".
According to BusinessWeek, Clayton Christensen is not only a Harvard Business School professor, he is also a "Managerment Guru," "a rising star of the New Economy," and "the most innovative business thinker in the world today." In March 2000, Mr. Christensen, along with St. Louis brokerage owner Neil Eisner, opened the Disruptive Growth Fund. Given his reputation, the financial world and investors had great expectations for the fund.

Chrisensen chose stocks based on his theory that companies that develop innovative products - "disruptive technologies" - can topple market leaders. Before even reaching its first anniversary the fund was liquidated - but not before it had lost sixty-four percent of its value. The only thing disruptive about the fund was that it disrupted the financial health of its investors."
2. Mistake 38 Do You Try to Time the Market?

There are scores of academic papers that show it's time in the market, rather than timing the market that matters. Here's a good article by Larry Swedroe that talks about how more money has been lost in anticipation of a correction, than in a correction itself and why that is.

http://www.etf.com/sections/index-inves ... nopaging=1

What do you think now?
"Invest we must." -- Jack Bogle | “The purpose of investing is not to simply optimise returns and make yourself rich. The purpose is not to die poor.” -- William Bernstein

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nedsaid
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Re: Bill Bonner: what's your take?

Post by nedsaid » Sat Apr 21, 2018 8:13 pm

Chicken Little 1990: The sky is falling.
Nothing happens.
Chicken Little 1991: The sky is falling.
Nothing happens.
Chicken Little 1992: The sky is falling.
Nothing happens..
Chicken Little 1993: The sky is falling.
Nothing happens.
Chicken Little 1994: The sky is falling.
Nothing happens.
Chicken Little 1995: The sky is falling.
Nothing happens.
Chicken Little 1996: The sky is falling.
Nothing happens.
Chicken Little 1997: The sky is falling.
Nothing happens.
Chicken Little 1998: The sky is falling.
Nothing happens.
Chicken Little 1999: The sky is falling.
Nothing happens.
Chicken Little 2000: The sky is falling.
Tech crash, start of 2000-2002 bear market. Economy chugs along.
Chicken Little 2001: The sky is falling.
Still in bear market, mild recession.
Chicken Little 2002: The sky is falling.
Bear market ends, economic recovery in full swing.
Chicken Little 2003: The sky is falling.
Nothing happens.
Chicken Little 2004: The sky is falling.
Nothing happens.
Chicken Little 2005: The sky is falling.
Nothing happens
Chicken Little 2006: The sky is falling.
Nothing happens.
Chicken Little 2007: The sky is falling.
Nothing happens, stock market and real estate market boom.
Chicken Little 2008: The sky is falling.
Sky falls, financial crisis, bear market, the Great Recession.
Chicken Little 2009: The sky fell, I told you so. Buy my newsletter.
Financial crisis subsides, stock market begins a new powerful bull market, economy starts to recover.
Chicken Little 2010: I was right about 2008. The sky is falling.
Economy and markets continue recovery.
Chicken Little 2011. The sky will fall in 2012. Buy my newsletter. I predicted 2008.
Economy and markets continue recovery.
Chicken Little 2012. The sky is falling.
Economy and markets continue recovery.
Chicken Little 2013: The sky is falling.
Nothing happens really, the taper tantrum causes a ripple in the markets.
Chicken Little 2014: The sky is falling.
Nothing happens.
Chicken Little 2015: The sky is falling.
Nothing happens.
Chicken Little 2016: The sky is falling.
Nothing happens.
Chicken Little 2017: The sky is falling. Buy my book on how I predicted the 2008-2009 financial crisis.
Nothing happens.
A fool and his money are good for business.

TreadLightly
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Re: Bill Bonner: what's your take?

Post by TreadLightly » Sat Apr 21, 2018 9:53 pm

arcticpineapplecorp. wrote:
Sat Apr 21, 2018 6:44 pm
I bet you haven't read Larry Swedroe's book titled "Rational Investing in Irrational Times". If you had, you'd realize you're making two mistakes that he covers in this book (he covers 52 mistakes in all):

1. Mistake 39 Do You Rely on Market Gurus?
From that chapter:
Each year Fortune selects its All-Star team of security analysts-the very best of the gurus. How did the stock recommendations the year 2000's All-Stars made in July of that year perform? While the S&P500 Index was falling nine percent, their stock picks were falling twenty-two percent through the end of May 2001. Source Fortune June 11, 2001.

Unfortunately for investors who rely on the forecasts of market analysts and strategists, such forecasts are only likely to produce yachts for the forecasters themselves, not for their clients. Steve Forbes, publisher of the magazine that bears his name, obviously agrees, quoting his grandfather, who founded the magazine eighty years ago: "You make more money selling the advice than following it." Source: St. Louis Post Dispatch, Oct 4, 1997.
On page 199 (hardback edition) Larry writes about a Clayton Christensen who wrote a book titled "The Innovator's Dilemna: The Revolutionary National Bestseller that Changed the Way we Do Business".
According to BusinessWeek, Clayton Christensen is not only a Harvard Business School professor, he is also a "Managerment Guru," "a rising star of the New Economy," and "the most innovative business thinker in the world today." In March 2000, Mr. Christensen, along with St. Louis brokerage owner Neil Eisner, opened the Disruptive Growth Fund. Given his reputation, the financial world and investors had great expectations for the fund.

Chrisensen chose stocks based on his theory that companies that develop innovative products - "disruptive technologies" - can topple market leaders. Before even reaching its first anniversary the fund was liquidated - but not before it had lost sixty-four percent of its value. The only thing disruptive about the fund was that it disrupted the financial health of its investors."
2. Mistake 38 Do You Try to Time the Market?

There are scores of academic papers that show it's time in the market, rather than timing the market that matters. Here's a good article by Larry Swedroe that talks about how more money has been lost in anticipation of a correction, than in a correction itself and why that is.

http://www.etf.com/sections/index-inves ... nopaging=1

What do you think now?
1. Thank you for the references. I haven't read any of Larry Swedroe's books yet, but I'll add this to the other two of his I will read.

This point was well made in The Boglehead's Guide to Investing, and maybe also in Bill Berenstein's Investor's Manifesto. I know this now, and boy did we make a mistake. Fortunately, since I've been introduced to these concepts, we've taken control of our finances and are buying into low cost index funds. My husband is still reticent though, caught up on the fear from Bill Bonner. Other books have similar quotes, they abound I'm sure, but since you've made these so accessible I'll share them tonight.

2. THIS is extremely helpful. I'd never read anything quite like this.

But here's the question: most people naturally Dollar Cost Average, Value Average, or in whatever way regularly purchase into their AA. We're in this situation of having been given this portfolio a few years ago, and we're finally taking it over. It was previously managed for us, and we're realizing we need to invest a ton of cash, then once that's done, continue to sell the holdings we don't want, then reinvest that cash.

My plan was to allocate heavily into fixed income, then Value Average in slowly, laddering out of our fixed income until we meet our AA. We're talking about a portfolio of over 1.5 million for some 30+ yr olds, most of which is currently in money markets (was previously making 0.48%!!!!! at Merrill Lynch).

Since committing to the BH philosophy, we've kind of taken the approach of not needing high risk, so I thought Value Averaging would be the best way to reduce the risk of suddenly chunking a bunch of cash into index funds in one small time frame in the market.

Would you just put it all straight in?

Again, thank you for this article, it's exactly the sound reasoning I was looking for.

tesuzuki2002
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Re: Bill Bonner: what's your take?

Post by tesuzuki2002 » Sat Apr 21, 2018 10:26 pm

TreadLightly wrote:
Thu Apr 19, 2018 12:32 am
my husband has really enjoyed following and internalizing Bill Bonner's take on the economy. i'm more Boglehead (didn't know it until recently, but I am) with a leaning toward hoping to get the chance to buy into a market downturn and score some great long-term returns.

after reading some of the Intro Boglehead recommended reading, there are some red flags that go up for me regarding Bill. the primary current issue is that he has, for a few years now, been forecasting economic doom, which has significantly impacted our willingness to enter the market. my husband out of fear, me out of hoping to take advantage of a dip. as we all know now, those last few years were pretty peachy. BB holds firm doom is looming, we remain in fear of entering the market at a high, and instead lose a lot of money every day in lost opportunity and inflation. if we make up a number of a clean 4% return for our uninvested funds over the past 5 yrs, we would've gained $260,000. instead we've bought some dern blasted gold and silver for the end of the world.

we've got no problem throwing money into equities when we hit a downturn, but with BB swearing it's coming, it's hard to buy in without a clear dip. i've essentially twisted my husband's arm to let me start trickling it in, but i would much rather help him believe in it than convince him.

i don't want any more gold, and i don't want a homestead in Argentina, Bill. so i want to know, can you give me a little friendly opinion on him? perhaps enough to change the opinion of a long-time reader? or does Bill Bonner have the gift of economic foretelling?

(mid 30s, high portfolio value, about 65% cash)

Edit: I read his 2015 response to criticism and accusations, and his response is an interesting read. He does not claim to know anything, he and his many publications provide the information the readers enjoy, with an emphasis on boldness not on being correct. He also says they predicted the 2000 and 2008 crashes, but I'm wondering how many years he warned of them before they actually happened.

I think you guys are really limiting your options.... you need to diversify... get into other markers.. Precious metals are a niche area.

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unclescrooge
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Re: Bill Bonner: what's your take?

Post by unclescrooge » Sat Apr 21, 2018 11:24 pm

nedsaid wrote:
Sat Apr 21, 2018 8:13 pm
Chicken Little 1990: The sky is falling.
Nothing happens.
Chicken Little 1991: The sky is falling.
Nothing happens.
Chicken Little 1992: The sky is falling.
Nothing happens..
Chicken Little 1993: The sky is falling.
Nothing happens.
Chicken Little 1994: The sky is falling.
Nothing happens.
Chicken Little 1995: The sky is falling.
Nothing happens.
Chicken Little 1996: The sky is falling.
Nothing happens.
Chicken Little 1997: The sky is falling.
Nothing happens.
Chicken Little 1998: The sky is falling.
Nothing happens.
Chicken Little 1999: The sky is falling.
Nothing happens.
Chicken Little 2000: The sky is falling.
Tech crash, start of 2000-2002 bear market. Economy chugs along.
Chicken Little 2001: The sky is falling.
Still in bear market, mild recession.
Chicken Little 2002: The sky is falling.
Bear market ends, economic recovery in full swing.
Chicken Little 2003: The sky is falling.
Nothing happens.
Chicken Little 2004: The sky is falling.
Nothing happens.
Chicken Little 2005: The sky is falling.
Nothing happens
Chicken Little 2006: The sky is falling.
Nothing happens.
Chicken Little 2007: The sky is falling.
Nothing happens, stock market and real estate market boom.
Chicken Little 2008: The sky is falling.
Sky falls, financial crisis, bear market, the Great Recession.
Chicken Little 2009: The sky fell, I told you so. Buy my newsletter.
Financial crisis subsides, stock market begins a new powerful bull market, economy starts to recover.
Chicken Little 2010: I was right about 2008. The sky is falling.
Economy and markets continue recovery.
Chicken Little 2011. The sky will fall in 2012. Buy my newsletter. I predicted 2008.
Economy and markets continue recovery.
Chicken Little 2012. The sky is falling.
Economy and markets continue recovery.
Chicken Little 2013: The sky is falling.
Nothing happens really, the taper tantrum causes a ripple in the markets.
Chicken Little 2014: The sky is falling.
Nothing happens.
Chicken Little 2015: The sky is falling.
Nothing happens.
Chicken Little 2016: The sky is falling.
Nothing happens.
Chicken Little 2017: The sky is falling. Buy my book on how I predicted the 2008-2009 financial crisis.
Nothing happens.
+1

You could probably write a kindle book based on this post!

TreadLightly
Posts: 140
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Re: Bill Bonner: what's your take?

Post by TreadLightly » Sat Apr 21, 2018 11:39 pm

I did a little research on my own question regarding entering the market slowly through Value Averaging, and found an article on Dollar Cost Averaging citing a study by Vanguard called "Invest Now or Temporarily Hold Your Cash?"

The study found that immediate investment, on average, outperformed "systematic implementation strategies." These strategies do reduce risk, but the trade off is return.

Great read!

Here's the article:
http://time.com/money/4668059/why-dolla ... -strategy/

It focuses more on the "DCA: bad, immediate investment: good" determination of the study, and less on the risk vs return aspect of the outcome, but it's a good read nonetheless.

Edit: the cash in the study was left as cash, and not invested into fixed income then moved over into equities at regular intervals.

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mrspock
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Re: Bill Bonner: what's your take?

Post by mrspock » Sun Apr 22, 2018 4:52 am

TreadLightly wrote:
Thu Apr 19, 2018 12:32 am
i don't want any more gold, and i don't want a homestead in Argentina, Bill. so i want to know, can you give me a little friendly opinion on him? perhaps enough to change the opinion of a long-time reader? or does Bill Bonner have the gift of economic foretelling?
+1 to what others have said about him, I read him in the early 2000s before I wised up (luckily I had very little to invest). Read John Bogle's book, the forums, then come up with a sensible AA (for your age & risk tolerance) and begin your journey to FI. Listening to folks like Bonner will greatly limit your chances to achieve FI.

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nedsaid
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Re: Bill Bonner: what's your take?

Post by nedsaid » Sun Apr 22, 2018 11:15 am

Uncle Scrooge, my post illustrates my feeling about the varies gurus over the years that predicted doom. They would predict the same thing year after year and then when something bad really happens, they claimed clairvoyance. Pretty much the old saying that a broken clock is right twice a day! There is the Stansberry guy, the guy who "predicted" the 2008-2009 financial crisis but actually didn't. There was Ravi Batra, who wrote two books on the second Great Depression that never happened. I remember Howard Ruff. Many, many others. That is what inspired my "Chicken Little" post.
A fool and his money are good for business.

drk
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Re: Bill Bonner: what's your take?

Post by drk » Sun Apr 22, 2018 12:00 pm

TreadLightly wrote:
Sat Apr 21, 2018 11:39 pm
I did a little research on my own question regarding entering the market slowly through Value Averaging, and found an article on Dollar Cost Averaging citing a study by Vanguard called "Invest Now or Temporarily Hold Your Cash?"

The study found that immediate investment, on average, outperformed "systematic implementation strategies." These strategies do reduce risk, but the trade off is return.

Great read!

Here's the article:
http://time.com/money/4668059/why-dolla ... -strategy/

It focuses more on the "DCA: bad, immediate investment: good" determination of the study, and less on the risk vs return aspect of the outcome, but it's a good read nonetheless.

Edit: the cash in the study was left as cash, and not invested into fixed income then moved over into equities at regular intervals.
It sounds like your goal is to mitigate the risk of this investment.
TreadLightly wrote:
Sat Apr 21, 2018 2:57 pm
I don't want to muscle my way into getting my husband to believe in the Boglehead philosophy [...] If/when the economy tanks, I want this to have been a joint decision, and I want us both to be behind buying the dip.
While lump-sum investing has a higher expected return, it's important to keep your actual goals in mind. If you want to reduce the risk of behavioral error (i.e. becoming unnerved at the sight of a crash), then DCA is a perfectly valid approach. You won't necessarily optimize your returns in the short-run, but maybe you will in the long-run by avoiding the impulse to withdraw your lump-sum investment after it's dropped 40%. You know your husband and yourself much better than we do.

TreadLightly
Posts: 140
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Re: Bill Bonner: what's your take?

Post by TreadLightly » Sun Apr 22, 2018 9:50 pm

drk wrote:
Sun Apr 22, 2018 12:00 pm
TreadLightly wrote:
Sat Apr 21, 2018 11:39 pm
I did a little research on my own question regarding entering the market slowly through Value Averaging, and found an article on Dollar Cost Averaging citing a study by Vanguard called "Invest Now or Temporarily Hold Your Cash?"

The study found that immediate investment, on average, outperformed "systematic implementation strategies." These strategies do reduce risk, but the trade off is return.

Great read!

Here's the article:
http://time.com/money/4668059/why-dolla ... -strategy/

It focuses more on the "DCA: bad, immediate investment: good" determination of the study, and less on the risk vs return aspect of the outcome, but it's a good read nonetheless.

Edit: the cash in the study was left as cash, and not invested into fixed income then moved over into equities at regular intervals.
It sounds like your goal is to mitigate the risk of this investment.
TreadLightly wrote:
Sat Apr 21, 2018 2:57 pm
I don't want to muscle my way into getting my husband to believe in the Boglehead philosophy [...] If/when the economy tanks, I want this to have been a joint decision, and I want us both to be behind buying the dip.
While lump-sum investing has a higher expected return, it's important to keep your actual goals in mind. If you want to reduce the risk of behavioral error (i.e. becoming unnerved at the sight of a crash), then DCA is a perfectly valid approach. You won't necessarily optimize your returns in the short-run, but maybe you will in the long-run by avoiding the impulse to withdraw your lump-sum investment after it's dropped 40%. You know your husband and yourself much better than we do.
We see a balanced approach best for us. We're not going to back out once we get it, so I want to feel like we made a very well thought out entry. If we lose some returns in order to mitigate risk, well, that's the whole game isn't it? And yes, I think it'll help us both be on the same page if we ease in.

It's an interesting point made in the study, too, that by DCA or VA into equities you're altering your AA until you arrive at your target. I never thought of it quite like that. It just sounds unnatural, though, to enter all at once.

heyyou
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Re: Bill Bonner: what's your take?

Post by heyyou » Mon Apr 23, 2018 4:44 pm

Bill Bonner: what's your take?
Bill Bonner is not going to share his wealth with you, so you need to invest for your future that will include stock market crashes between long periods of slow stock market growth. Many here are moderately wealthy from steadily buying stock mutual fund shares during the period after inflation was bad in the 1970s.

As noted by others, consider what is on the far side of a market drop--more market gains, so your concern about investing just before the next crash is short sighted, if you can resist selling out during the low period. Invest now but half each in stock and bond index funds, knowing that the bond fund will not drop as far in a crash, as a stock index fund.

Many posters here are retirees who felt the same as you, but during the 1980s. Now we have seen how the stock market can fluctuate, but have also seen the long term growth that is far greater than those worrisome down markets. These days, we can see how well we have been paid to tolerate the stress of owning somewhat risky assets with constantly fluctuating prices.

Also read about behavioral finance, since people are just buckets of the wrong traits and insecurities. Wise and patient investing feels so counter-intuitive at the start, not dissimilar to fearing a jet airplane crash when the drive on the freeway to the airport is more dangerous than the flight on the airline.

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corn18
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Re: Bill Bonner: what's your take?

Post by corn18 » Mon Apr 23, 2018 4:53 pm

This guy Bob always makes me feel better about my BH way of investing:

Bob: the world's worst market timer

http://awealthofcommonsense.com/2014/02 ... ket-timer/

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